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Credit Card Frauds

Major credit card frauds and how to curb them

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Theft of Identity

This is where frauds use other people’s information to conduct a transaction this fraud can be prevented by asking the customer to verify their identity.

Phishing this is when a person receives a message to send their credit card information from frauds. This information may be used to break the law. To avoid this problem, customers are urged to confirm the source of any message that asks them for their credit card information.

Page jacking is common on the internet. This occurs when a person follows a link and is redirected to a page that is not recognized. It is somehow challenging to avoid page jacking. This fraud is dangerous as you may find yourself purchasing a product through a fake site. Merchants should be careful and ensure that their sites have not been stolen to minimize this problem.


Fee scams happen when you are asked to provide an advanced payment and in return you will earn some money. To arm yourself against this vice, don’t accept these offers.

Check scams come inform of large payments. A customer may be willing to pay more in advance or even overpay for a product using checks. Be wary as this may be a scam to get free properties.

Money orders

Though they are mostly safe due to counterfeit security measures, some experts have specialized in making fake money orders. Check carefully for any money order from risky parts to curb this problem.

To be safe, merchants should avoid conducting business with companies that have no good history with PCI compliance. This is usually a major source of data breaches for many companies online. It is good to do business with trusted people over the internet and you won’t have any ifs.

Some e-commerce sites found it difficult to prevent fraud in the early stages of the introduction of e-commerce. This has greatly been reduced due to the fact that there are fraud detection systems now available. Below are some of the suspicious behaviours experienced by many merchants online.

  • Fake new customers who use other people details to make a transaction
  • Orders that are abnormal- These involve large orders and are mostly done by new customers.
  • Identical orders that are large. When a customer purchases many items that are similar might be a fraud transaction
  • Getting less time shipping of merchandise- This involves customers using channels that deliver merchandise quicker than normal.
  • Using of international shipping addresses- verification of addresses can only work in the U.S. and U.K. this presents a possibility of fraudulent shipping of products.
  • Making payments using same account numbers in credit cards- This is where some criminals use software’s to generate account numbers and use fake numbers to make a purchase and then cease to use them when they have completed the transaction.
  • Having different cargos shipped to many different addresses using a similar credit card number. Happens when frauds use the same credit card number and have the products shipped to different places
  • Many orders from one IP address but with different credit card numbers. Frauds use the same computer but with different credit card numbers to order for a merchandise.

Use of Payment Gateways in place of PCI

Sometimes merchants may decide to use payment gateways as a means of getting PCI compliant without having to undergo the whole process of getting compliant directly. This in itself brings a lot of benefits to merchants who are time conscious and want to save something from the deal. Despite the benefits, there are also some limitations to using gateways.

Despite the fact that getting PCI DSS compliant can be overwhelming, merchants are highly advised to do so as this will make sure that no one has regrets about the decisions they make while trading online. It is good to note that ‘cheap can be expensive’ and whatever reason you have in doing something, you should take extra care.

To begin with, payment gateways protect non compliant merchant applications. When you are using a PCI compliant gateway, you may be able to operate with shopping Carts and payment apps without getting any PCI applications. This is solely because PCI processor is not able to know any details about the applications used by merchants. By taking this risk which is eminent in business, merchants are able to benefit somehow with the process minimizing expenses.

Although it may seem naïve to add a gateway because of costs involved, it is becoming increasingly common for merchants to use gateways as they add the compliance property to their processor interface. In other terms, gateways tend to reduce costs in the long run for a merchant.

PCIs tend to confine your payment gateway options into a thin choice. Given the scope of payment gateway companies, some can merely afford to get PCI compliant resorting to the use of cheaper techniques to operate. This may be working through QSAs and as a result discouraging merchants from using them.

There is a possible loss of control when using other payment gateways as a means of getting compliant rather than managing a payment system by themselves. Compliance assessments work to access whether a merchant is compliant with the PCI DSS. This may be involving a long process for merchants hiding behind other payment gateways rather than managing their own payment gateways. Merchants who have managed to get PCI compliant by themselves tend to argue that it is easier to take control of their business than when using a different payment gateway.

Security may be compromised. Although it may seem beneficiary to work under another payment gateway, it may be highly risky in terms of security. It is better to get your own payment gateway system that is PCI compliant. This is because it is easier to monitor and control all the security of your system.

Just getting PCI compliant does not necessarily mean that you are safe from fraudulent activities. Many merchants have been victims of fraud by trying to reduce costs. This is because some payment gateway companies do not care about the welfare of their clients and only get to the basics in terms of security. For instance, they only security measures they have are the common Address Verification system (AVS) and the Card Code Verification (CCV). This drastically increases risks as software’s usually require regular updating and improvements to maintain high security levels.

Payment gateways usually overlook the issue of data security as a feature and they tend to ignore important details in transactions that are carried out through their systems. As a result of this, there are many frauds that go unnoticed in these systems. This may cause huge losses for innocent merchants who fall victims by only choosing the wrong payment system.

Whether a merchant uses out-sourcing or in-sourcing payment gateways in PCI, it is of paramount importance to trade carefully with what you decide to do about your payment system. Screening all your options and choices will assist in reducing any derailment in your part and will act to provide a secure and safe path for your business.

For retailers doing business online, there are various websites that train them on how to conduct business online safely and securely. Basically, the National Retail Federation (NRF) will guide you on how to be safe online to avoid losses. Any breaches to data in payment gateways are taken seriously and that is why it is important to report them to the relevant authorities for investigations to be carried out to solve the problem. There are fraud control procedures in place to curb data breaches and ensure that the online community is safe.

PCIs produce an environment that is conducive for financial services to be conducted in a safe and secure manner. Getting acquainted with the PCCI DSS is a good step to start with as it ensures that all customers’ information is safe.